Editorial: Work together to fix latest state budget hole

Gov. Rod Blagojevich is the most unpopular, least trusted public official of any stature in Illinois, and perhaps America, if his dead-last 13 percent approval rating is any indication.

Gov. Rod Blagojevich is the most unpopular, least trusted public official of any stature in Illinois, and perhaps America, if his dead-last 13 percent approval rating is any indication.

For that reason, count us among the skeptical that Blagojevich will be given any more power than he already has to address the state's budget crisis. On Tuesday the governor unveiled his "Emergency Budget Act," which would give him significantly more authority to unilaterally curtail state spending and borrow short-term to whittle the mammoth backlog - some $4 billion - of state bills awaiting payment. In addition, the governor plans on going to Uncle Sam on hands and knees for a bailout - where have we heard that before? - of $1 billion over three years.

Illinois is hardly alone in its financial straits. California and New York have anticipated budget deficits of $15 billion and $12 billion (the latter over the next two years), with governors in both likewise begging Washington for help, even though they largely are victims of their own poor decision-making. Indeed, state capitals have racked up staggering amounts of debt to feed their undisciplined spending, which on average have been more than double the rate of inflation for most of this decade.

As a result, "now it's cold shower time," according to a Wall Street Journal column this week that singled out Illinois as competing for first among the worst.

"This is not the first time states have been caught in this trap," author Steve Malanga of the Manhattan Institute for Policy Research wrote. "One reason is because many fail to address their deep, structural budget problems during the good times, preferring to use booming tax revenues to start or expand politically popular (and often costly) programs. Another, deadlier issue is their failure to deal with huge and growing employee pension and benefits liabilities."

In short, legislators have been unable to say no to powerful public sector unions, promising the sky in benefits while not backing up any of it with the necessary funding. "Illinois, which has the largest percentage of unfunded pension liabilities among the states, actually cut its contributions to pension funds by $2.3 billion in the flush years of 2006 and 2007 as stock market returns were rising."

And now these states want the feds to rescue them from the self-inflicted injuries brought about by their own recklessness and irresponsibility? If you hated the federal bailout of the fat cats in the banking industry, then you can't possibly have any stomach for this.

Again, the Wall Street Journal column put it well: "States of course argue today, as they have countless times in the past, that they need federal aid to avoid cutting essential programs that hurt their most vulnerable citizens. But the blunt fact is that the money will only encourage them to keep doing business the same old way rather than seek innovative solutions ... setting the stage for worse problems to come."

Indeed, when will America stop rewarding self-defeating behavior? Perhaps the time to draw that line in the sand is now.

There is no question that Illinois is in a world of hurt. We shudder to think what will happen to a Peoria District 150, already beset by lower-than-expected local revenues, if schools get a mid-fiscal year slap of $600 million as Blagojevich hacks his way to $2.2 billion in cuts. There are elements of the governor's plan, like short-term borrowing, that may be unavoidable if the state wants the private sector to continue doing business with it.

But ultimately this proposal is not a permanent solution for a state government whose leaders have steadfastly refused to seriously try to come up with one.

As such, it's difficult to trust any of them, but given his history, it's fair to trust this governor least of all. Case in point is the way Blagojevich trotted out this latest bombshell, again keeping lawmakers out of the loop. It virtually guarantees this will be another DOA.

Blagojevich and the Legislature should work this crisis out together, for a change, and not abandon this veto session until they've done something that will allow the state to limp into next spring, at which point perhaps a real fix can be found. In the meantime, may Uncle Sam not become an enabler of the Land of Lincoln's continued dysfunction.